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Saturday, December 27, 2014

Once upon a time there was a rule of thumb that there were 20 sheep in New Zealand for every person living there. Yep, I kid you not. The old adage used to be "3 million people; 60 million sheep".

I liked to think of this as another important "Great Ratio". You know - in the spirit of the famous "Great Ratios" suggested by Klein and Kosubod (1961) in the context of economic growth, and subsequently analysed and augmented by a variety of authors. The latter include Simon (1990), Harvey et al. (2003), Attfield and Temple (2010), and others.After all, it's said that (at least in the post-WWII era) the economies of both Australia and New Zealand "rode on the sheep's back". If that's the case, then the New Zealand Sheep Ratio (NZSR) may hold important clues for economic growth in that country.My interest in this matter right now comes from reading an alarming press release from Statistics New Zealand, a few days ago. The latest release of the Agricultural Production Statistics for N.Z. revealed that the (provisional) figure for the number of sheep was (only!) 26.9 million at the end of June 2014 - down 4% from 2013.I was shocked, to say the least! Worse was to come. The 2014 figure puts the number of sheep in N.Z. at the lowest level since 1943! I'm sure you can understand my concern. We'd better take a closer look at this, and what it all means for the NZSR: